Savosolar Oyj › Company announcements › Savo-Solar announces its plan to arrange a rights issue of approximately EUR 4.3 million and discloses financial information for the period 1 January – 31 March 2017

Savo-Solar announces its plan to arrange a rights issue of approximately EUR 4.3 million and discloses financial information for the period 1 January – 31 March 2017

Savo-Solar Plc Company Announcement 29 May 2017 at 4:45 p.m. (CEST)

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Savo-Solar announces its plan to arrange a rights issue of approximately EUR 4.3 million and discloses financial information for the period 1 January – 31 March 2017

The Board of Directors of Savo-Solar Plc (“Savo-Solar” or the “Company”) has decided to arrange a partially underwritten rights issue totalling approximately EUR 4.3 million (the “Offering”) with additional warrants enabling the Company to raise up to a maximum of approximately 2.1 MEUR (the “Warrants”). The Offering is expected to consist of a maximum of 70,938,664 new shares (the “Offer Shares”). The Offer Shares would constitute approximately up to 67 per cent of all shares in the Company should the Offering be fully subscribed. New information regarding financials of the Company for the period 1 January – 31 March 2017 has also been released.

Summary of the Offering

Savo-Solar is currently growing its potential project base faster than expected. Due to the growth combined with extensive investments in increased production capacity and cost efficiency and the slow development of order backlog due to temporary market slowdown in the Company’s main market Denmark in the end of 2016, the Company is in need of working capital in order to realise future projects and to meet the market demand.

Savo-Solar is planning to give all its shareholders registered in Savo-Solar’s shareholder register maintained by Euroclear Finland Ltd (“Euroclear Finland”) or Euroclear Sweden AB (“Euroclear Sweden”) one (1) book-entry subscription right (the “Subscription Right”) for every one (1) share held on the Offering record date. Each one (1) Subscription Right entitles the holder to subscribe for two (2) Offer Shares.

The subscription price is expected to be EUR 0.06 per Offer Share. Compared to the closing price of the Company’s share on First North Finland on 26 May 2017 (EUR 0.16) the subscription price includes a 62.5 per cent discount.

The record date for the Offering is planned to be 9 June 2017 with the last day of trading including the Subscription Rights on 7 June 2017 and the first day of trading excluding the Subscription Rights on 8 June 2017.

The subscription period for the Offer Shares (the “Subscription Period”) is expected to commence on 14 June 2017 at 09:30 Finnish time (08:30 Swedish time), and it is expected to end on 30 June 2017 at 16:30 Finnish time (15:30 Swedish time) in Finland and on 28 June 2017 in Sweden at 16:30 Finnish time (15:30 Swedish time).

In addition, Savo-Solar is planning to offer each subscriber of the Offer Shares one (1) warrant (the “Warrant”) free of charge for every three (3) Offer Shares subscribed and paid for in the Offering, the subscription of which the Board of Directors has approved. Each Warrant would entitle its holder to subscribe for one (1) new share in the Company. The subscription price for the shares subscribed based on the Warrants will be defined based on volume weighted average price of the Company’s shares in First North Finland during the last ten (10) trading days before the beginning of the subscription period. However, the subscription price shall not be less than EUR 0.06 per share nor higher than EUR 0.09 per share. The maximum number of Warrants would be 23,646,221 if the Offering was fully subscribed.

Approximately EUR 4.3 million before the transaction costs is expected to be raised in the Offering if the Offering is fully subscribed. A maximum of approximately EUR 2.1 million will be raised through the Warrants if all are subscribed at the maximum subscription price of EUR 0.09 per share.

The Offering is underwritten to approximately 60 per cent by current shareholders and external underwriters. The external underwriters are entitled to receive their underwriting compensation either in cash or in new shares of the Company by setting off the underwriting compensation against the subscription price of the new shares in a directed share issue to be conducted after the Offering, if necessary.

An additional bridge financing of EUR 0.6 million has been raised as working capital until the proceeds of the Offering are expected to be received in July 2017. Interest of the bridge loan amounts to 7.5 per cent fixed.

Reasons for the Offering and use of proceeds

Savo-Solar manufactures internationally award-winning solar thermal absorbers and collectors, as well as energy production systems built on these. The collectors with MPE absorbers are, according to the information available to the Company’s management, the most efficient in the world. Savo-Solar focuses primarily on large solar thermal collectors and industrial-size heating systems. The Company started product deliveries in June 2011 and has since delivered over 50,000 square metres of collectors to its customers.

The Company’s rapid growth continued in 2016 when its revenue was EUR 5,404.8 thousand, meaning a growth of 164 per cent compared to 2015. At the end of 2016 the Company’s order backlog weakened mainly due to the fact that while the Company was delivering large orders, new orders were not received in the Company’s main market in Denmark at the same rate. The reason for the declined demand was the delay in the decision to extend the energy saving and emission reduction programme of the Danish state, which postponed the investment decisions of energy companies. The decision of the continuation of the programme was finally made at the end of December 2016, and after that the market activity has increased rapidly.

Fast growth, investments in cost-effective production, a lowered order backlog since the end of 2016 and preparation for the execution of coming orders have resulted in the Company needing more working capital. The Company aims to raise approximately EUR 4.3 million with the Offering. Should the Offering be subscribed in full, the Company expects to receive net proceeds of approximately EUR 3.8 million from the Offering, after deducting the estimated Offering expenses payable by the Company, totalling approximately EUR 0.5 million.

The Company will use the net proceeds from the Offering i) to secure its needs for working capital so that the Company can deliver signed and upcoming orders in 2017-2018 and expand its operations to new markets (approximately EUR 3.2 million), and ii) for the repayment of the capital and interest of the bridge loan financing (approximately EUR 0.6 million).

Financial information that has not been published before (unaudited)

INCOME STATEMENT

EUR (thousand)

1 January- 31 March 2017

1 January – 31 March 2016

Revenue

108.8

981.1

Other operating income

5.3

62.8

Materials and services

-348.9

-941.4

Personnel costs

-534.6

-542.5

Depreciation, amortisation and write-downs

-187.8

-131.0

Other operating expenses

-492.4

-440.5

EBIT

-1,449.7

-1,011.5

Total financial income and expense

-26.1

-84.8

Net profit (loss)

-1,475.8

-1,095.9

BALANCE SHEET

ASSETS

EUR (thousand) 31 March 2017

31 March 2016

Intangible assets

1,909.1

2,048.9

Tangible assets

1,411.6

701.6

Shares in companies

161.9

132.2

Fixed assets

3,482.6

2,882.7

Inventories

722.6

669.6

Long-term receivables

221.9

2.2

Short-term receivables

183.3

493.6

Cash and cash equivalents

1,035.6

1,454.8

Current assets

2,163.4

2,620.2

Assets in total

5,646.0

5,502.9

EQUITY AND LIABILITIES

EUR (thousand) 31 March 2017

31 March 2016

Share capital

470.2

470.2

Unrestricted equity fund

19,149.1

12,713.8

Retained earnings

-15,860.5

-10,385.2

Net/Profit loss for reporting period

-1,475.8

-1,095.9

Equity

2,283.0

1,702.9

Provisions

135.7

–

Capital loans

1,431.3

1,431.3

Loans from financial institutions

370.7

363.2

Other liabilities

157.0

314.3

Long- term liabilities

1,958.9

2,108.6

Loans from financial institutions

167.4

150.1

Advanced received

0.0

594.1

Trade payables

626.9

672.2

Other liabilities

49.0

-93.9

Accrued liabilities

425.1

368.9

Short-term liabilities

1,268.4

1,691.4

Total equity and liabilities

5,646.0

5,502.9

The Offering

The size of the contemplated Offering will be approximately EUR 4.3 million. The Offering has been underwritten to 60 per cent.

The Board of Directors of the Company is planning to offer up to 70,938,664 new shares in the Company for subscription in accordance with the shareholders’ preferential subscription right. All shareholders registered in Savo-Solar’s shareholder register maintained by Euroclear Finland or Euroclear Sweden are planned to be given one (1) book-entry Subscription Right for every one (1) share held in the Company on the Offering record date, which is approximately 9 June 2017. Each one (1) Subscription Right would entitle their holder to subscribe for two (2) Offer Shares. The Subscription Rights are planned to be registered in the shareholders’ book-entry accounts in the book-entry system maintained by Euroclear Finland approximately on 9 June 2017 and in the book-entry system maintained by Euroclear Sweden approximately on 13 June 2017. The Subscription Rights are planned to be freely assigned and they are expected to be traded on First North Finland and First North Sweden between 14 June and 26 June 2017.

After the subscription, temporary shares corresponding to the Offer Shares subscribed for based on the Subscription Rights (the “Temporary Shares”) will be entered into the subscriber’s book-entry account. The Offer Shares will be entered into the subscriber’s book-entry account once they have been entered into the Trade Register, approximately during week 28, 2017. Trading in the Temporary Shares is planned to commence on First North Finland and on First North Sweden as their own special share class approximately on 14 June 2017. The Temporary Shares will be combined with the Company’s current shares after the Offer Shares have been registered into the Trade Register. The combination is planned to take place approximately during week 29, 2017 and the Offer Shares are planned to be subject to trading together with the Company’s existing shares on First North Finland and on First North Sweden approximately during week 30, 2017.

Planned timetable for the Offering

7 June 2017

Resolution regarding the Offering by the Board of Directors

7 June 2017

The prospectus is published

7 June 2017

Last day of trading including the Subscription Rights

8 June 2017

First day of trading excluding the Subscription Rights

9 June 2017

Record date for the Offering

14-26 June 2017

14 June 2017

Trading period for the Subscription Rights

Trading starts in Intermediary Shares (BTA)

14-28 June 2017

The Subscription Period for the Offering in Sweden

14-30 June 2017

The Subscription Period for the Offering in Finland

4 July 2017

Announcement of outcome of the Offering

Week 29, 2017

Last day of trading in the Temporary Shares on First North Finland

Week 29, 2017

Last day of trading in the Temporary Shares on First North Sweden

Advisers

Mangold Fondkommission AB and Augment Partners AB are acting as financial advisors to the Company in the Offering. Smartius Oy is acting as the legal adviser to the Company on aspects of the Offering related to the Finnish law.

This company announcement contains information that Savo-Solar Plc is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication by aforementioned contact person on 29 May 2017 at 4:45 p.m. (CEST).

Savo-Solar in brief

Savo-Solar with its highly efficient collectors and large-scale solar thermal systems has taken solar thermal technology to the next level. The company’s collectors are equipped with the patented nano-coated direct flow absorbers, and with this leading technology, Savo-Solar helps its customers to produce competitive clean energy. Savo-Solar’s vision is to be the first-choice supplier to high performance solar installations on a global scale. Focus is on large-scale applications like district heating, industrial process heating and real estate systems – market segments with a big potential for rapid growth. The company primarily delivers complete systems from design to installation, using the best local partners. Savo-Solar is known as the most innovative company in the business, and aims to stay as such. The company has sold and delivered its products to 17 countries on four continents. Savo-Solar’s shares are listed on Nasdaq First North Sweden with the ticker SAVOS and on Nasdaq First North Finland with the ticker SAVOH. www.savosolar.fi.

This release or the information contained therein shall not be distributed, directly or indirectly, in Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or the United States. The information contained in this release do not constitute an offer of, or invitation to purchase any securities in any area, where offering, procurement of or selling such securities would be unlawful prior to registration or exemption from registration or any other approval required by the securities regulation in such area. This release is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations issued by virtue of it. Savo-Solar has not registered, and does not intend to register, any offering of securities in the United States. No actions have been taken to register the shares or the offering anywhere else than in Finland and Sweden.

The information contained herein shall not constitute an offer of, or invitation to purchase any securities in any jurisdiction. This release is not a prospectus and does not constitute any offer, invitation or investment advice to subscribe for or purchase securities. Investors should not subscribe for or purchase any securities or make any investment decisions referred to herein except on the basis of information contained in a prospectus issued by Savo-Solar.